Heska Corporation

and welcome to the Heska Corporation first quarter 2021 earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mr. John Agard, Director of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Welcome to Heska Corporation's earnings call for the first quarter of 2021. I'm John Agard, Head of Investor Relations at Heska. With us this morning, we have Kevin Wilson, HESCA's Chief Executive Officer and President, and Katherine Grassman, HESCA's Chief Financial Officer. Mr. Wilson and Ms. Grassman will provide details surrounding the results reported, and then we will open the call to questions. Prior to discussing HESCA's results, and before I turn the call over to Kevin, I would like to remind you that during the course of this call, we may make certain forward-looking statements regarding future events or future financial performance of the company. We need to caution you that any such forward-looking statements are based on our current beliefs and expectations and involve known and unknown risks. Based on our current beliefs and expectations involve uncertainties which may cause actual results and performance to be materially different from that expressed or implied by those forward-looking statements. Factors that could cause or contribute to such differences are detailed in writing in this morning's release. HESCA Corporation's annual and quarterly filings with the SEC and elsewhere. Any forward-looking statements speak only as of the time they are made and HESCA does not intend and specifically disclaims any obligation or intention to update any forward-looking statements to reflect events that occur after the time such statement was made. And finally, to facilitate broad participation in the question and answer session this morning, we ask that each participant exercise discretion and limit their questions with follow-up as necessary and as time permits. With all that being said, it is now my pleasure to turn the call over to Kevin Wilson, HESCA's CEO and President. Kevin?

Hey, John, thanks, and good morning, everybody. Hey, I know it's a crowded animal health release calendar today, and I really do appreciate that you're taking the time with HESCA this morning. For those of you who have to leave early, the summary is simple. HESCA had a great first quarter and a great start to the year. Our underlying markets are doing wonderfully well, and we believe it is sustainable. Our product launches are on schedule, and we are convinced that Heska is a great place to be in 2021 and beyond. I encourage listeners to fully review the results and the data published in this morning's release. I think you will find them helpful in filling in the gaps. With the remainder of our time this morning, Catherine, John, and I will try to provide you with some additional color and helpful answers during our prepared remarks and Q&A where we can go a little bit deeper in the areas that interest you the most. But before we get there, I would like to share a few observations with you. On the overall market situation, it's great. On top of decades long positive underlying trends in veterinary healthcare, there's been a step up function of millions of additional pet families globally over the past year. Veterinarians are reporting double digit growth in pet visits overall. and even faster acceleration in the long-term trend of increasing diagnostics during those visits. We at Heska and most in our industry believe that these gains are sustainable and that they're long-term. Specific to Heska in the first quarter, our North American lab consumable sales grew 23.9% from an expanding utilization and price, which is further supported by our improving share position these past few years and strong end-user demand. North America imaging grew a very impressive 91.3%, benefiting from the work that we did last year to reorganize and expand our Salesforce into a unified address focus structure. We believe this location-based focus, rather than our prior modality-based division, prepares us well for our in-process major new product launches. In our international segments, Skill, CVM, and Heska teams delivered a really solid quarter and start to the year in nearly all geographies, they capture great momentum in lab consumables and great adoption of our subscriptions model in select European markets. Our combined organization's products rationalization into an international best of breed product stack is well underway to delivering better customer experience, sales attractiveness, customer price, company margin, and competitive differentiation. We intend to press on even faster with these initiatives throughout the remainder of the year. Operationally, our strong margin generated from selling more of the most important products and consumable lines was efficiently captured by strong company-wide operational discipline and efficiency. I was again pleased to see that when Heska sells more of the right mix, we do see operating leverage. In our R&D and commercial launch efforts, our many announced projects continue to progress within targets that have been previously announced. For LM&AIM, that means our highly anticipated urine and fecal point of care platform will be installing in the second quarter on schedule and that we continue to see solid demand and pre-subscriptions for that product. Early wins with Hescoview Specialty Services in top tier hospitals in North America for digital cytology have also confirmed our enthusiasm for entry into professional services in the first quarter with the acquisition of Lacuna Diagnostics. The teams are already put together and subscriptions are already being signed, now installed, and now servicing. On our other announced analyzers, test menu expansion and new services are also now launching in rapid-fire succession now and throughout 2021, and we continue to see strong demand for what we are launching There are so many products and projects launching that I encourage investors new to Hesco to review our latest investor presentations and our investor day presentation from November of last year for more information on several of them. Moving on to our resources. It's fair to say that our capital structure has never been this well prepared to play offense in our wonderful and now global sandbox. In the first quarter, we successfully raised substantial growth capital and we are preparing to properly put it to work. It is also fair to say that our team, our human resource, is also in the best condition of any period in our history. We are excited, equipped, and well-positioned to have a great 2021 and beyond as we continue to win in this second half of our five-year strategic plan. And you know I can't get through a call without updating you on what that is. First, we will double the geographies and the customers that we serve, which we've done. Second, we will double the products and the addressable revenue lines that we offer, which we have also done. And third, we will continue to grow our core business, which we've done throughout 2020, done now in the first quarter of 2021, and anticipate continuing to do throughout the balance of the year. The multiplier effect of these three major accomplishments leads me to anticipate a great performance for the rest of 2021 and into 2022. We've begun the first of four laps in 2021 very strongly. Investors will remember that we have maintained annual guidance throughout the pandemic in 2020 and 2021, and we have generally met or exceeded most expectations. With this strong start to the year, we are well on pace to reach higher levels of our ranges in 2021 and perhaps a bit further. The first quarter of 2021 has been fun. April has been fun. May is off to a fun start, and I think the rest of 2021 will be fun as With that, I'll turn the call over to Catherine to detail the quarter and to provide you with additional information, and then we'll take some Q&A. Catherine?